ITV asks for more time to discuss licence fees

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The Independent Online
Cathy Newman

The ITV companies have written to the Independent Television Commission requesting more time to consider the watchdog's proposals about licence renewal, according to industry sources.

Leslie Hill, chairman of the ITV Association, the independent television industry's sovereign body, sent a letter to Sir Robin Biggam, chairman of the ITC, asking for another month to consider the ITC's document on licence renewal.

Privately ITV executives are believed to have criticised the document for its turgid prose, with some saying it offered further evidence of the ITC's failure to move with the times.

The ITC had originally asked for a response from the industry by the end of September, but the ITV companies are lobbying for a delay as the issues concerned are important and complex. In addition, discussion of the proposals has been hampered by the absence of key ITV and ITC executives on holiday.

The document proposed a change to the way in which licence fees were previously calculated, which had led to wild discrepancies in the amount paid by different companies.

Instead of basing payments on a cash bid figure, the ITC suggested that 75 per cent of future licence fees should be linked to advertising revenue.

As a result, some City analysts calculated that United News & Media, which owns three ITV licences, stood to gain pounds 20m annually from 1999 if it renewed the three ITV licences it owned as early as possible.

City analysts have expressed concern that the ITC said it would take into account programme sales in the UK and overseas when drawing up a value for each licence. Some have argued this would discourage broadcasters from expanding their programming resources.